Does gold represent an effective protection against inflation: The case of Serbia

Abstract

Gold today has multiple uses. In addition to the instrument for financial investments, gold is used in the jewelry industry, but also in the industry for the production of various electronic components. After the collapse of the Bretton Woods system, gold gained an increasing role as an investment instrument. The traditional view is that gold represents a safe haven in periods of economic and political crises, as well as inflation. However, in recent years there has been an increasing number of papers that question this traditional view. Therefore, the paper analyzes whether gold is a protection against in ation in Serbia. The subject of the work analysis is the last twenty years. The paper consists of four parts. In the first part of the paper, a historical account of the development of money, i.e. the gold standard, is given. The second part of the paper provides an overview of the literature dealing with the issue of the role of gold. In the third part of the paper, an analysis of gold price trends and in ation in Serbia was carried out. And at the end of the paper, concluding considerations were given.